Natural gas gold rush: Is your state next?

By Dan Vergano, USA TODAY

The script might not play out exactly the same in each new community touched by the nationwide boom in natural gas and oil drilling, but the changes have a familiar echo:

By Eileen Blass, USA TODAY

A shale gas well operates at night in Moshannon State Forest in Clearfield County, Pa. Twenty states including Pennsylvania have shale gas wells, rigs that tap rock layers harboring gas in shale formations.

A shale gas well operates at night in Moshannon State Forest in Clearfield County, Pa. Twenty states including Pennsylvania have shale gas wells, rigs that tap rock layers harboring gas in shale formations.

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Trucks. Noise. Cash. Conflict.

Since the late 1990s, American landscapes have become dotted with a small forest of shale gas wells — 13,000 new ones a year, or about 35 a day, according to the American Petroleum Institute. In the past decade, this steady stream of development has become a gusher as nearly half the country has staked claim to these energy riches. In 2000, the USA had 342,000 natural gas wells. By 2010, more than 510,000 were in place — a 49% jump — according to the U.S. Energy Information Administration.

Twenty states have shale gas wells, so-named because they tap rock layers that harbor the gas in shale formations (with names such as Marcellus, Utica, Barnett). The bulk of the drilling has come since 2006, according to the EIA.

First, the "landmen," or agents from drilling companies, show up offering three- to six-year drilling leases to property owners. The payoff can be as little as $15 an acre or up to $6,000 an acre, producing a new class of wealthy landowners, though some have used the windfall to simply pay off old farm debts.

Then the trucks arrive and the drilling starts, using a process called hydraulic fracturing, or "fracking," to retrieve the natural gas. The process pumps millions of gallons of water, sand and chemicals underground to fracture shale layers and release its natural gas.

That's what happens below the Earth's surface. Above ground, rents increase and hotel rooms begin to fill up. In the process, out-of-the-way towns that had been moseying along for decades begin to change: Some folks are thrilled at the infusion of jobs and cash, and others worry about higher rents and the massive change in the landscape. After all, right before their eyes, forests and farms become factories for finding fossil fuel.

"The issue is, what kind of landscape is left behind? Who's going to win? Who's going to lose?" says Harvard public policy professor David Keith, speaking at a National Academy of Sciences event in May.

Whatever the changes, fracking is no longer a distant phenomenon for many Americans. Natural gas production from shale was just shy of a trillion cubic feet in 2006. Last year, it swelled to 7.19 trillion cubic feet, a 600% increase, according to the EIA.

Stephen Cleghorn, owner of a 50-acre certified organic farm and goat dairy in Reynoldsville, Pa., is worried hydraulic fracturing gas drilling activity nearby will affect his animals and the farm he and his wife started in 2005.

At this rate, it might be coming soon to a town near you.

Where the money is good

Starting with efforts during the 1990s to fracture the Barnett shale in Texas — a 5,000-square-mile rock layer more than 320 million years old and loaded with natural gas — shale fracking has crept across the country. More than 1,400 wells were drilled last year across Pennsylvania alone, and nearly that many the year before, according to the state's Department of Environmental Protection.

"Oh my heavens, yes, the boom is here," says Ohio State University agricultural extension agent Mike Hogan, who until recently worked in two eastern Ohio counties, Harrison and Jefferson. Both sit atop the Utica shale, about 10,000 feet down and prized for its "wet" natural gas, rich with liquid ethane, butane, propane and heavier liquids that can be made into gasoline.

As natural gas prices are down and gasoline prices top $3 a gallon in most of the country, the action in hydraulic fracturing has found a home in eastern Ohio.

"The number of trucks on the roads is incredible," Hogan says. "But the money is more than welcome here."

States swept up in the fracking frenzy rush to keep pace with the relatively new phenomenon.

In New York, community and business groups are fighting over an unreleased proposal by Democratic Gov. Andrew Cuomo that could limit fracking to a handful of economically struggling counties along the border with Pennsylvania.

In May, regulators unveiled updated rules to cover fracking in Ohio, the latest state to take such a turn. The regulations require water well tests within 1,500 feet of gas wells, partial disclosure of fracking fluids and other measures to ensure "cradle-to-grave" monitoring of wells.

Next door in Pennsylvania, regulators approved similar rules last year for drilling from its Marcellus shale, a layer of rock about 7,000 feet deep stretching from New York State to Tennessee, which was the star of the boom six months ago. The Marcellus shale produces mostly "dry" natural gas, a commodity whose price has fallen by half over the past year.

The two states illustrate the wider issues that ride tandem with the spread of the fracking boom, seen from North Dakota to Texas and beyond.

"A big issue is just change itself. Too often 'fracking' gets blamed when it's the whole package that leads to the problems — the trucks, the noise, the workers, the environmental problems, the feeling of being disempowered by regulations," says rural sociologist Kathy Brasier of Penn State. "At the same time, there's no doubt that this industrial activity causes significant change to the landscape, and there are unanswered questions about environmental impacts that concern people."

The big questions

The first to confront the questions are landowners, sometimes offered big money for rights to drill on their property.

"We have had some landowners walk into extension offices with 'million-dollar' checks, and ask, 'What now?' " says Ohio State's Kenneth Martin, who heads the university's agricultural extension efforts that have helped farmers and landowners in the state for decades.

Besides producing such "winners," boomtowns typically see more jobs (unemployment is down more than a percentage point in Ohio's eastern counties in the past year, partly because of manufacturing and drilling activity), more occupied hotel rooms, more Texas and Oklahoma license plates on drillers' cars and higher property values, increasing rents and taxes.

"The big question we hear is, 'when do I pull the trigger' and sign a lease agreement," says Steve Schumacher, an Ohio State extension agent in Belmont County, where the heavy drilling has not quite started. "We have had some time to prepare in Ohio because we have seen what happened elsewhere." Schumacher and his colleagues tell landowners to get everything in writing, check their water for methane and brace for change.

Even as the price of natural gas dropped to around $2 for a thousand cubic feet this warm winter — half last year's price — states caught up in the boom have enjoyed an employment windfall when jobs nationally have been hard to come by. Since 2009, Pennsylvania has 38,900 natural resources jobs, up 72%; North Dakota has 21,900 jobs, a 172% surge, according to Federal Reserve data.

These numbers don't include jobs added to service the fracking industry — everything from selling workers donuts to making steel pipes used in the process. One-time lease checks — some for more than six figures — also can juice local economies, according to Schumacher.

At the same time, concerns have mounted about the risks of having such industrial activity near towns and farms. Some farmers have taken smaller lease checks on the promise that the wellheads wouldn't be on their land. That shifts the hassle and noise of a wellhead — an industrial site up to 8 acres in size and operating 24 hours a day while it is being drilled — onto the land of neighbors who took bigger checks. The wells drill down to the shale layer, then fracture the rock sideways to recover the natural gas under all the leased land.

The other side of the boom

"I never, ever, thought about leaving. It was my lifelong dream to be a farmer," says Jenny Lisak, 58, of Punxsutawney, Pa., who owns a blueberry and apple farm with her husband, Tom. "Now I have to worry about air pollution and water pollution and life not being normal around here anymore."

Amish buggies wait for tanker trucks filled with drilling fluid to rattle past on the country road in front of Lisak's farmhouse. Across the lane is a neighbor's alfalfa field, leased to a drilling company. About a mile away is a deep disposal well, one of only a handful in the state, where leftover fracking fluid goes to be deposited in deep underground rock formations.

Lisak, who has no desire to see her farm become a fracking site, sees nothing but downside around her. She says the threat of spills keeps her up at night.

For many others, the good times are rolling. Welders employed in the natural gas industry average $28.48 an hour, 6 bucks more an hour than other industries pay, according to the Bureau of Labor Statistics.

"We're still hiring," says David Schultz, a plant manager for Forum Energy Technologies' metal fabrication plant in Clearfield, Pa., one county over from Lisak's farm. About half the fracking well tanks that are manufactured or fixed at the plant are bound for Ohio and the Utica shale, Schultz says.

Just as the gold rush boom of the 1800s left ghost towns in its wake, some wonder whether fracking boomtowns will revert to bust towns once the trucks have left.

In Ohio, the concern is that too many homes or hotels will be built, Hogan says. "I worry about jobs after the workers aren't drilling the actual wells and the royalty checks slow down. What happens then?"

Brasier says "there's no recipe book" to help communities perfectly respond to the mix of new wealth, environmental concerns, housing price fluctuations, crime spikes, noise, trucks and other disruptions to daily life associated with an energy boom.

"All we have is a list of ingredients that each place will face in different amounts in different ways," she says.

Environmental concerns

As for environmental concerns ushered in with the fracking boom, there are more questions than definitive answers.

"We need more technical information that does not exist," says Vicki Colvin, head of the Center for Biotechnology and Environmental Nanotechnology at Rice University in Houston. This lack of clarity has fed a roiling debate between environmental organizations, industry groups and professors over the possibility of fracking fluids contaminating air and water near well sites.

A University of Texas review this year concluded that the biggest environmental threat was from spills and poorly constructed wells. This review followed a Duke University study last year that found higher odds of natural gas contamination in water wells within 1,100 yards of fracking wells. That led to a push for stronger "setback" distances between drill sites and wells in regulations for sites in Pennsylvania and Ohio.

There is also the recent concern that fracking might cause earthquakes.

A National Research Council report this month concluded that fracking "does not pose a high risk" of triggering meaningful quakes. It noted, however, that deeper wastewater disposal wells do pose rare risks of triggering minor quakes like the ones that shook Youngstown, Ohio, last year.

Indeed, the challenges and concerns that arise with this energy boom vary greatly from state to state, and even from town to town.

"Every place is different in its history and the people who live there," Brasier says. "Every company is different in how it does things. So the way that each community responds will be different, too."

Then there's the challenge that people are happy to wrestle with: what to do with all that money.

"We're now moving on to talking to people about financial management, handling those checks, expecting the trucks," says Schumacher, the extension agent from Belmont County. "I think we are ready for what's coming. Overall, there's a sense of excitement to be where things are happening."

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